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EU: Deal nearly done for reverse gas flows from Slovakia to Ukraine

Nov. 22, 2013 at 12:06 AM   |   Comments

BRUSSELS, Nov. 22 (UPI) -- A European Union official said this week Ukraine is quickly nearing a deal with Slovakia allowing it import gas from its neighbor through reverse west-east flows.

Such an agreement would allow Ukraine to reduce its dependence on Russian natural gas supplies and move it closer to the EU's economic orbit, as the two sides try to work out an "association agreement" at a summit next week in Lithuania.

Marlene Holzner, a spokeswoman for EU Energy Commissioner Gunther Oettinger, told the Ukrinform news service Wednesday the two countries and Brussels were "close to an agreement" on the deal, under which Ukraine could eventually import as much as 20 million cubic meters per day from Slovakia.

Ukraine believes it could get such gas for less than it pays to Russian provider Gazprom, with whom it has been embroiled in a longstanding dispute over high prices.

Russia opposes the deal, saying it is illegal because Slovokia's Eustream transit operator would essentially be reselling gas it had originally obtained from Gazprom.

Ukraine in May started testing reverse-flow gas supplies from Slovakia. The capacity of even one line from Slovakia could provide an uninterrupted supply of as much as 10 billion cubic meters per gas a year, Kiev had said, making a huge impact in its efforts to diversify away from Russia.

If a deal can be struck soon, it would likely be signed at the EU's third Eastern Partnership Summit in Vilnius, to be held Nov. 28-29 -- where Brussels hopes to agree with Ukraine on a series of trade and political measures that would deepen its ties with Western Europe.

Under proposed the gas deal, Eustream would to agree spend about $20 million to upgrade a now unused Soviet-era pipeline running to deliver the supplies to Ukrtransgaz, the transport arm of Ukrainian state gas company Naftogaz, the British energy analyst ICIS Heren reported.

The analyst, citing sources it did not name, said a decision has been made to refurbish the old pipeline rather than use an existing connection at Velke Kapusany -- the main entry point for Russian gas leaving Ukraine for Western Europe, which is under the watchful eye of Gazprom.

The new connection is seen as the best way to get around Gazprom's objections to the deal, the sources said. Ukraine has used a similar strategy since last year to obtain reverse flows of Russian gas from Hungary and Poland via small pipelines away from the main transit lines.

Ukrainian Energy Minister Eduard Stavytskyy said last week an association agreement with the EU would accelerate the process of opening a Slovak gas corridor and give impetus to the development future joint projects.

Ukraine's chances of obtaining an association agreement took a hit over the issue of imprisoned former Prime Minister and opposition leader Yulia Tymoshenko when the country's Parliament last week couldn't agree on how to handle her case.

A law that would allow her to travel abroad for medical care has been repeatedly postponed, and the chances of passing it in time for next week's summit appeared to be dwindling, German broadcaster Deutchse Welle reported.

Russia has threatened to slap trade restrictions on Ukraine if it goes ahead with the EU association agreement, which is a first step toward eventual membership in the European bloc.

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